PlanB announced that its $98K Bitcoin target for November is based on the “floor model”, not the famous S2F model.
PlanB: $98K November Forecast Not Based On S2F Model
Earlier in the year, analyst PlanB shared some price targets in Bitcoin for the coming months. Most of these predictions turned out to be reasonably accurate, but given the current situation at the moment, a target would be considered unachievable.
Bitcoin is below $34K, triggered by Elon Musk’s energy FUD and China’s mining crack down.
There is also a more fundamental reason that we see weakness in June, and possibly July. My worst case scenario for 2021 (price/on-chain based): Aug>47K, Sep>43K, Oct>63K, Nov>98K, Dec>135K pic.twitter.com/hDONOVgxH1
— PlanB (@100trillionUSD) June 20, 2021
As can be seen, PlanB’s target for November was 98 thousand dollars. However, we are now on the 18th and Bitcoin has yet to show any strong bullish momentum. On the contrary, the leading cryptocurrency has slumped as low as $60,000 over the past few days and is showing no clear signs of recovery for now. That being the case, BTC needs a bounce of more than 60% to get close to the target, and it needs to happen in just 12 days for it to hit the target.
Because of this, some members of the crypto community began to question the analyst’s best known price prediction model, S2F. In response, PlanB posted a tweet yesterday explaining that the aforementioned price targets are not based on the S2F model. Instead, these goals seem to be based on one of the analyst’s tools, the “Floor model.”
To clarify: 98K Nov prediction is NOT based on S2F model but on my floor model.
As I said before (in tweets and latest podcasts), I use 3 models:
1) S2F
2) Floor model
3) On-chain model
If for example 98K Nov floor model prediction fails, that does NOT mean S2F or on-chain fails. https://t.co/tj6SSwSzKR— PlanB (@100trillionUSD) November 17, 2021
As the tweet explains, the S2F model still won’t fail if the $98k target for this month isn’t met.
What is Bitcoin Stock Flow Model?
S2F, or exactly the stock-to-flow model, is a price forecasting method based on the ratio of supply (stock) to annual production (flow). The model can be applied to any finite asset, particularly Bitcoin or metals such as gold and silver. The model takes advantage of the fact that such assets will continue to become scarce as time goes on.
Below is the latest chart for the BTC S2F model.
As the chart above shows, the model has been pretty close to the truth overall so far, although there are some areas of divergence. The Floor model, from which previous estimates were taken, is a different method from S2F and is based on on-chain data.
In responses to the tweet, PlanB also clarified that the stock-to-flow forecast for this Bitcoin cycle is an “average” price of $100,000. Therefore, at this time it is difficult to say at what level the model may become invalid.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.